Abstract

The governance of information technology (IT) service provision entails all thoseelements of the structure and process of contracting and organisation that arenecessary in order to deliver effective and efficient IT services within today'sorganisations. This thesis develops a framework integrating those elements ofgovernance with a view to explaining actual governance structures and to guidingrelevant decisions in practice.Until the late 1980s, the principal concerns with respect to the organisation of ITactivities revolved around the issues of centralisation versus decentralisation andend-user computing versus specialist control. Whilst contracts for various systemsand services have always been a significant part of the IT department's activity, theissue of structuring such contracts took a prominent position on the managementagenda in the beginning of 1990s with the proliferation of large contracts of the'total outsourcing' kind. IT outsourcing rekindled interest in and reshaped theagenda of the organisation of IT provision. The debate on IT outsourcing providedthe motivation and the starting point of this thesis.Thus, chapter 1 reviews this debate and, following on the opinion of others, recaststhe question of 'whether to outsource or not' as 'how to set up the governance (i. e.the structure and process of contracting and organisation) of IT service provision'.In order to shed some light on the elements of governance, chapter 2 turns on arange of economic theories of the firm. These theories are critically reviewed andsome preliminary suggestions as to how they might inform the governance of IT areput forth. The chapter concludes by setting the theoretical foundations for the restof the thesis. The notion of a governance continuum between the ideal pure marketand the ideal pure hierarchy is introduced. Actual governance structures, it isargued, can be placed on this continuum as individual instances.Before advancing onto more substantive work, chapter 3 pauses to reflect on theepistemological basis of this research project. The main principles of theepistemological position adopted here are taken from the philosophical arguments of transcendental realism. The implications of this epistemological position for theempirical methods and the theoretical claims made in this thesis are also examined.Chapter 4 documents an intensive case study at British Petroleum Plc. The purposeof this case study was to draw lessons from practice and to assess the relevance ofthe theories of chapter 2. This case study was an interactive learning processthrough which the researcher sought access to management practice in order toassess economic theories, while the managers at BP sought a broader understandingof IT outsourcing. The outcome of this interaction was the S-CAGE frameworkwhich coupled theoretical insights with practical relevance.The S-CAGE (Service Clustering And Governance Establishment) framework isdescribed in detail in chapter 5. It is put forth as both an explanatory and anormative account of the governance of IT service provision. It is based on thenotion of governance continuum, it introduces the idea of grouping services intoclusters and it provides a classification of the elements of governance that should becustomised to the characteristics of each cluster of services.Chapter 6 presents two further case studies aimed at evaluating the usefulness of SCAGEin understanding and explaining alternative outsourcing practices. ICI andAnglian Water have been visited for this purpose. On the basis of these cases, theconcluding chapter summarises the strengths and limitations of the proposedframework. An attempt is also made to set forth some preliminary theoretical ideasextending the notions of clustering and governance continuum. The thesisconcludes with a final short illustration of the use of the S-CAGE framework.